Oblivionis - liquidators are not incentivized and liquidation may revert for high LTV pools #606
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Medium
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Oblivionis
Medium
liquidators are not incentivized and liquidation may revert for high LTV pools
Summary
liquidators are not incentivized and liquidation may revert for high LTV pools
Vulnerability Detail
During the liquidation process, three limitations are guaranteed:
debtRepaidValue/(1 - discount)
.For pools with
90% < LTV < 98%
, liquidation will revert when liquidator liquidates bad debts as specified byLIQUIDATION_DISCOUNT
.Since there are not enough assets in the position that can satisfy
assetSeizedValue
, liquidation would simply fail.To fix this issue, please refer to Morpho blue for a similar LLTV-LIF formula.
Impact
liquidators are not incentivized and liquidation may revert for high LTV pools
Code Snippet
https://github.com/sherlock-audit/2024-08-sentiment-v2/blob/main/protocol-v2/src/RiskModule.sol#L111
Tool used
Manual Review
Recommendation
Refer to Morpho blue
Duplicate of #91
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